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Inside Flextronics SBS: Serving OEMs Large and Small
January 24, 2013 |Estimated reading time: 4 minutes
Last week, I took a little drive and covered the “Inside Flextronics SBS Manufacturing Forum” at the Flextronics facility in Columbia, South Carolina.
First, some background about Columbia. Even though it’s the capital city, Columbia has always felt a little bit behind the times. It was a town you passed through on the way to Myrtle Beach, not somewhere you’d ever consider relocating.
My, how times have changed. High-tech companies like Siemens, Trulite, Medtronic and Avaya are moving into Columbia, drawn by the low tax rates and proximity to the University of South Carolina (AKA “The Real USC”), Midlands Technical College, and Clemson University. Amazon now has two facilities in the Palmetto State: a warehouse in West Columbia and a distribution center in nearby Spartanburg.
Columbia benefits from its location: Charleston’s deepwater port is only 100 miles away. Flextronics SBS (Special Business Solutions) is located near the Columbia Metropolitan Airport, which has its own FedEx fleet.
This “Inside Flextronics” forum, a year in the making, highlighted how Flextronics SBS manages NPI with OEMs large and small. Flextronics is a $30 billion company, with facilities located around the world. This company brings in 20 times more revenue in one year than the entire EDA software industry. But Flextronics SBS occasionally works with some customers who are so small that they can barely be termed OEMs.
Figure 1: Flextronics Columbia General Manager Marty Wilson leads a tour of the facility.
GM Marty Wilson led us on a tour of the Columbia operation. The first thing I noticed was the lack of PCB assembly. I had pictured pick-and-place machines and chip shooters. On the shop floor, there was a lot of final assembly going on, plugging populated PCBs into boxes and hooking up wires and fiberoptic lines. Kodak film kiosks, Avaya handsets, and Teradata data storage cabinets were in various stages of “advanced manufacturing,” as it’s officially known.
Lean, kaizen, and jidoka are spoken here. Each customer’s products are assembled in areas set up specifically for that purpose, sort of a “factory within a factory,” with lines devoted to Kodak, Avaya or Teradata. Staffers worked while a “shot clock” overhead ticked off the numbers--how many of each product should be built by this time today versus how many were actually built. One woman got behind the clock while we were distracting her with questions, but she was ahead of the target number by the time we came back around.
Figure 2: Workers assemble Avaya handsets in the Avaya "factory within a factory" on the shop floor.
We checked out a few special projects, such as Trulite’s hydrogen generators and an electric car equipped with a Flextronics power plant. But the standout for me was a head-mounted display unit. The unit’s inventor brought one unit to Flextronics, and when the engineers asked for the schematic, the man said it was all in his head. So, the Flextronics technologists worked with him, taking copious notes while they watched him build one unit from scratch.
I think Flextronics wants everyone to know that they don’t solely work with billion-dollar OEMs.
Keynote speaker Ron Keith of Riverwood Solutions gave a funny, informative talk on developing the perfect EMS relationship. (Hint: there’s no such thing.)
Keith opened his talk with, “EMS providers are like spouses: If you have more than three exes, it’s probably you!” He cautioned OEMs against constantly switching EMS providers to save a few percent: Changing over can cost up to 6% of the first year’s revenue with the new manufacturer.
“Don’t take a six-point hit to save two,” Keith advised. And don’t try to keep your EMS partner from making a profit.
Customer Ron Seftick, CEO of Trulite, discussed the way Flextronics worked with smaller startups like his, from helping him get the hydrogen generator technology off the ground to eventually taking it worldwide. (Trulite won $96,000 in the Greater Columbia Fuel Cell Challenge a few years ago.)
Later, another customer, Teradata COO Bruce Langos, explained how Flextronics didn’t just assemble their storage and data systems; Flextronics staffers provide the “final touch” before the systems are sent to their final destinations. Usually, these huge cabinets, whose racks are packed with individual “nodes,” are developed for financial institutions, but E-Bay purchased a 128-cabinet system that handles 40 petabytes of data. The biggest order yet for Teradata, the cabinets had to be shipped in tractor trailers, all loaded by Flextronics staff.
Figure 3: A wall of Teradata cabinets capable of storing petabytes of data. Flextronics staff wires them together and ships them to Teradata's customers.
Everyone I met at Flextronics, from the GM to the security guards, was friendly, even eager to talk to the press. I didn’t expect that from a Tier 1 EMS company, but then again, I’ve never been invited to tour a Tier 1. Maybe some of the other “big guys” will open their doors for forums like this.
This forum was a big success, especially for a first-time event. We all enjoyed the good food, sweet tea and great people. I expect Flextronics SBS will do this again in the future.